Although the adoption of new tech has improved operations and services for 80% of property companies, 15% have no plans for tech investment in the foreseeable future, according to a survey by the Urban Land Institute and law firm Goodwin.
With the rise of IoT, the cloud, smartphones and 5G, the property industry has widely implemented new ideas and innovations in recent years – but some exceptions remain.
Most respondents across every sector have adopted some new tech in the last three years, and 85% of companies have plans for future investment. That means nearly one in six do not – although some of them said it was because they are satisified with their existing tech.
The report, Proptech: Changing the way real estate is done, also shows that just 15% of companies include climate risk and mitigation as one of their business areas, reflecting the relatively recent emergence of sustainability as an industry concern.
Based on a survey of 200 ULI members and 18 in-depth reviews, the report analysed adoption, impact, strategies and future plans among different business areas, such as property management and construction.
Here are six takeaways from the report:
- Most respondents have adopted new tech in the last three years. In every business area – with the exception of raising capital – adoption ranged from 73% (transaction management) to 97% (climate risk and mitigation). Businesses raising capital have been substantially less likely to have adopted new tech (51%).
- Implementing new tech has had a positive impact on most companies’ operations/services (80%) alongside finances and decision-making (70%). Some 94% of businesses in property management have seen an improvement in operations/services, while data analytics has had the most positive impact on decision-making, with 86% reporting either a high or moderate positive impact.
- Property management has felt the biggest positive impact on finances from new tech. More than four in five businesses working in that area (82%) said that new tech has improved finances. On the other end of the spectrum, 61% of companies working in health/wellness reported a positive impact – 26% said it was too soon to tell.
- Businesses are more likely to invest in or partner with another company when pursuing new technologies. However, companies are diversifying their strategies and in some areas, particularly data analytics, will develop products in-house or pursue a mix of strategies.
- Companies in only three business areas plan to ramp up future tech investment: data analytics, health/wellbeing and climate risk and mitigation. Some 77% of companies in data analytics have plans for future tech investment, compared to just 46% that have recently adopted new tech. That rise is much more subdued among businesses working in health/wellness and climate risk and mitigation.
- Climate mitigation/resilience is a growing concern and a factor in tech investment in most business areas. The only areas where fewer than half of respondents identified climate as a factor for recent or planned tech investment were raising capital and transaction management.
Ed Walter, global CEO of ULI, said: “Historically real estate has not been regarded as the most technology focused of industries but that is changing, and changing fast. Proptech has undeniably become essential to companies to maintain a competitive market position, with technologies being integrated in all business areas, including, meaningfully, providing the tools to address climate change and meeting ESG commitments.
“The cloud, IoT, mobile devices and 5G have all opened the doors on the potential for innovation, but it is the application of this technology from the end users of proptech – real estate companies – which will shape the transformation of the industry over the next three years and beyond.”